Nash Equilibrium in a Pay-as-bid Electricity Market: Part 1 – Existence and Characterisation

We consider a model of a pay-as-bid electricity market based on a multi-leader-common-follower approach where the producers as leaders are at the upper level and the regulator as a common follower is at the lower level. We fully characterise Nash equilibria for this model by describing necessary and sufficient conditions for their existence as well as providing explicit formulas of such equilibria in the market.

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submitted - 2015

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